‘Tis the season for charitable giving, and Americans are increasingly donating. According to the Giving USA Foundation, individuals, estates, foundations, and corporations across the nation contributed an estimated $390.05 billion to U.S. charities in 2016, an increase of 2.7 percent in current dollars from the prior year. Giving by individuals increased nearly 4 percent, accounting for much of the rise in total donations.
While the reasons for making charitable donations may vary by individual—and range from supporting personal causes to setting a good example for younger generations—reaping the tax benefit of giving is among the most common. If this is also important to you, Betterment—the nation’s largest stand-alone online financial advisor—can help you maximize every dollar you give through their new Charitable Giving program.
Managing More Than $11 Billion in Assets
Launched in 2010 by Jon Stein (CEO), Eli Broverman (President), Sean Owen and Ryan O’Sullivan, Betterment manages more than $11 billion in assets for over 300,000 American investors.
“We don’t require a minimum balance, so anybody can get started investing with us,” Alex Benke, VP of Advice and Investing at Betterment, told RewardExpert. “But on average, our typical customers are about 37 years old and higher earners looking to improve on how they’ve been investing previously.”
While Betterment’s core product offering is automated investment management that is aligned to an individual’s goals, they offer a number of coordinating services including financial and retirement planning advice, retirement accounts (including IRAs and Roth IRAs), and taxable investing accounts (including individual, joint, and trust accounts).
“We have two other lines of business as well,” Benke explained. “One is Betterment for Advisors, which enables a financial advisor with a separate practice to outsource the investment management piece to Betterment. The other is Betterment for Business, which enables employers to have us manage their company 401k.”
Charitable Giving Offers a Two-Part Tax Benefit
On November 28—also known as Giving Tuesday—Betterment launched a new service for investors called Charitable Giving. The program allows investors using Betterment to donate appreciated shares from their taxable accounts to partner charities including The Breast Cancer Research Foundation (BCRF), UNICEF USA, World Wildlife Fund, Feeding America, Big Brothers Big Sisters of NYC, Save the Children, Wounded Warrior Family Support, Hour Children, Against Malaria, DonorsChoose and GiveWell.
“A good majority of our customers invest with us in taxable accounts,” Benke said. “As those accounts increase in value, you have to pay taxes on them whenever you take out money for any particular need. However, donating shares from your Betterment account directly to charity allows you to avoid the taxes on the sale of those shares. You also get the deduction for their value. It offers a two-part tax benefit that not a lot of people know is possible.”
Benke added that the process is very efficient because Betterment moves the assets without paperwork and enables donors to avoid paying credit card companies a fee on the transaction that they would normally be charged if donating in a traditional way.
“The charity also gets the funds pretty much immediately through the transfer,” he said. “Oftentimes, other processes for donating appreciated shares take a couple weeks or a month before the charity actually gets the funds. All of these benefits make Charitable Giving a much better way to give than anything else that is out there.”
Focused on Customer Success
Benke said that getting started with Betterment is easy. “You just need to come to our website and sign up for an account,” he explained. “You then link it to your bank account and can begin to invest money directly. We’ll ask you some questions about your goals and your financial situation before designing a portfolio strategy across all the different types of accounts you might have,” he said.
“Betterment is very focused on the success of our customers,” Benke continued. “We are applying time-tested investment principals around low-cost index fund investing crafted around your specific goals including what you’re trying to achieve and when. We optimize it all for you along the way to keep you on track. And we always help you save on taxes.”
To learn more about the benefits of investing with Betterment or to sign up for an account, visit www.betterment.com.